Act 3 is in the swamps of Kurast. Going into this act, you learn that the weasley little bozo helped the demons out in desert-land, and is now running with the special stone to destroy it. You also learn that the wanderer is of course out here, now looking to help Mephisto. In fact, when you first go into the Spider Forest, you find the Wanderer, who promptly vanishes.

Note that you should be around Level 20 by now. You really need to fight just about anything you come across, and not take shortcuts, otherwise you won't be strong enough here to face what lies ahead.